Regulatory: When is a permanent injunction not permanent?

For more than 30 years, Medicare has kept the payments it makes to individual physicians confidential based upon a permanent injunction that was entered in 1979 by the Middle District of Florida in Florida Medical Ass’n, Inc. v. Dep’t of Health, Education and Welfare.

In the case, the American Medical Association and the Florida Medical Association (FMA) were co-plaintiffs and successfully obtained a permanent injunction preventing the release of physician-specific Medicare payment data. The Department of Health and Human Services (HHS) has relied upon the FMA Injunction as a basis to deny Freedom of Information Act (FOIA) requests for such data since that time.

Interestingly however, after years of perpetuating expensive litigation seeking permanent, nationwide enforcement of the FMA Injunction, HHS reversed its position and argued in favor of vacating the FMA Injunction, declaring that the injunction was essentially invalidated by changes in the law dating back to 1982.

On May 31, U.S. District Judge Marcia Morales Howard entered an order granting Rule 60(b)(5) relief and vacated the FMA Injunction. Judge Howard essentially ruled that the physician’s privacy concerns no longer outweigh the public interest in obtaining Medicare payment data.

The American Medical Association and the Florida Medical Association opposed vacating the FMA Injunction and argued that HHS should continue keeping such information confidential.

Real Time Medical Data argued that the 1979 FMA Injunction should be vacated because the balance between the physicians’ privacy interests in maintaining Medicare reimbursements confidential and the public interest in disclosure of such information has changed greatly since 1979, making continued enforcement of the 1979 FMA Injunction a “manifest injustice.” Additionally, Real Time Medical Data contended that the physicians’ privacy interest in reimbursement amounts has been further reduced by the “Qualified Entity Program”— created by the Patient Protection and Affordable Care Act of 2009, as amended by the Health Care and Education Reconciliation Act of 2010—because CMS will disclose identifying Medicare Part B data to qualified entities to create provider performance reports and will publish those reports even if the providers suggest that the Medicare data is erroneous.

Dow Jones took a similar approach as Real Time Medical Data. Dow Jones argued that the 1979 FMA Injunction should be vacated, pursuant to Rule 60, because “the factual and legal landscape” has changed dramatically since 1979. The arguments made by Dow Jones included providers no longer set their own “reasonable fees,” the public interest in disclosure of the Medicare data, noting that since 1979, Medicare “has grown twenty-fold in nominal dollars, and nearly three-fold as a percentage of the total federal budget,” and the prevalence of Medicare fraud.

Judge Howard ruled “it is evident that the Privacy Act no longer authorizes any of the injunctive relief granted in the 1979 FMA Injunction, much less the permanent ongoing prospective relief at issue here. Thus, the obligation to forever withhold all such information “has become impermissible under federal law.” Judge Howard concluded that “a judgment should not be permitted to stand if it ‘rests upon legal principle that can no longer be sustained’” and vacated the 1979 FMA Injunction.

Although the laws relating to the confidentiality of patient health information is stronger than ever, HHS seems to recognize that the confidentiality of payment information to healthcare providers no longer applies, and is willing to release such information.